Tesla Model S Price Drop? When Will it Come?

Tesla Model S Price Drop? When Will it Come?

So, you’ve got your eye on a brand new Tesla Model S. You’re in a place financially where you can afford it, but you’ve heard about Tesla’s recent tendency to change prices and you don’t want to pay full price for your new car just before a surprise price drop. Is there a way to know if the Model S price is about to change again?

As of June 2021, prices for the Tesla Model S have actually increased by about $10,000 over the 2020 prices. There is some indication that the 2022 models will experience a price drop of $6,000 to $7,000, but these adjustments will depend on several factors, like competition and supply and demand.

Read on to find out more about if and when you can expect the Model S price to drop. We’ll also discuss previous price drops and increases as well as the reasons behind these changes.

Is Tesla Going to Drop Prices on the Model S Again?

Following a couple of different price drops in 2020, the Tesla Model S Series experienced a surge in prices in 2021. In the early part of the year, the base model jumped up to $79,990, which is more than $10,000 higher than the listed price in late 2020. Meanwhile, in June, the Model S Plaid also jumped up about $10,000, to $129,990.

Considering these price hikes have come quite recently, there is little reason to suppose that Tesla will lower their prices back to 2020 levels anytime soon. That said, if you’re willing to wait for the 2022 version of Model S, it’s possible you may be able to save $6,000 to $7,000.

According to Car Indigo, the 2022 Model S will have a starting price of $72,990, which would be a $7,000 drop. However, both Kelley Blue Book and Edmunds indicate that the 2022 Model S will actually undergo another price increase. Both sites expect the 2022 model year to be up over $80,000 for the base model.

Keep in mind that the price will be greatly affected by which Model S you plan to purchase.

The base model is the least expensive but also comes with the fewest features. The Long Range model has greater gas mileage than the base model, with the 2021 Model S Long Range boasting an incredible 412-mile range between charges. The Model S Plaid is the most expensive option, known for going 0 to 60 in less than 2 seconds and a top speed of 200mph.

It’s also worth noting that Tesla has not officially released its prices for 2022 and has said nothing to indicate that prices will be going back down. With that in mind, any and all information regarding future price changes is nothing more than speculation at this point.

Previous Model S Price Drops

In 2020, Tesla dropped prices on the Model S Series a couple of times. According to Tesla Oracle, the first price drop came in May, when each version of the Model S was marked down by some $5,000. Later on, in October, prices were dropped again, this time between $3,000 and $5,500 depending on the version.

These price cuts led to an impressive savings of between $8,000 and $10,480, and the base model was listed at just $69,420.

As you might imagine, price drops of this magnitude were largely related to supply and demand–with so many people at home and out of work due to the COVID-19 pandemic, fewer people were buying cars, and even fewer people were willing to shell out the big bucks for luxury electric cars.

It’s unclear whether this significant price drop helped Tesla sell more cars, but one thing is fairly certain: with pandemic related restrictions slowly beginning to decline and life starting to get back to normal, demand for cars is starting to increase again.

It will still take time for the new car market to get back to where it was before COVID-19, but it is steadily improving. With this in mind, it seems unlikely that Tesla Model S prices sink back to the numbers of 2020 anytime soon.

Before the pandemic, Tesla Model S prices were fairly constant for a few years. The last price drop occurred in 2016, when the starting price for a Model S dropped from $69,000 to $68,000. The year following, however, the price jumped up to $78,000 and has, with the exception of 2020, remained near that price ever since.

As long as demand remains high enough and competition remains fairly low, there’s a good chance that Tesla cars in general, and the Model S in particular, will continue to see climbing prices over the next several years.

Factors that Affect Tesla Model S Prices

So, why exactly did prices drop so far in 2020? And why did Tesla hike the prices all the way back up in 2021?

Tesla CEO Elon Musk recently stated that the most recent price increases are “due to supply chain price pressure industry-wide.” In other words, the costs involved in manufacturing the cars have gone up. This, in turn, could be due to a number of different factors, including:

  • Vehicle redesign. The Model S underwent some design changes in early 2021. Some of these changes include advancements to technology systems such as in-car gaming and added screens. Many more of the features are now automated as well–for example, the 2021 model now has buttons you push to open the doors rather than handles.

All of these upgrades are pricey, and the extra cost naturally gets passed on to you, the consumer.

  • Supply and demand. As noted above, the demand for new luxury cars went way down in 2020. Tesla, and other companies, had no way of anticipating this change, so they ended up with too many cars that weren’t selling. As a result, they reduced prices as an incentive to get people to buy their cars.

In 2021, more and more people started buying cars again, so the demand began returning to more normal levels. As a result, Tesla was able to raise their prices back up to normal levels.

  • Competition. Another factor to consider is the number of competitors Tesla is facing. More electric cars are being produced every year by a range of different companies, but Tesla still has the advantage of its reputation–it is known for being one of the original companies to produce an electric car.

This reputation goes a long way in setting Tesla apart from some of the other electric cars available. More people are willing to pay higher prices for a Tesla car than for other competing brands.

All of these factors contributed to the price reduction in 2020, and all of them also influenced the price increase in 2021.

Final Thoughts

The Tesla Model S experienced a significant price decrease in 2020 before jumping back up in 2021. There are rumors that the price may go back down somewhat in 2022, but this has yet to be confirmed.

New car prices are affected by a number of things, including supply and demand and the cost involved in production. Considering production costs have increased and demand for new cars is beginning to recover after the COVID-19 pandemic, it seems unlikely that the Tesla Model S will experience another price drop in the foreseeable future.


The articles here on ThatTeslaChannel.com are created by Greg, a Tesla vehicle and Tesla solar expert with nearly half a decade of hands-on experience. The information on this site is fact-checked and tested in-person to ensure the best possible level of accuracy.

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